Climate warming causes permafrost thaw predicted to increase toxic methylmercury (MeHg) and greenhouse gas [i.e., methane (CH4), carbon dioxide (CO2), and nitrous oxide (N2O)] formation. A microcosm incubation study with Arctic tundra soil over 145 days demonstrates that N2O at 0.1 and 1 mM markedly inhibited microbial MeHg formation, methanogenesis, and sulfate reduction, while it slightly promoted CO2 production. Microbial community analyses indicate that N2O decreased the relative abundances of methanogenic archaea and microbial clades implicated in sulfate reduction and MeHg formation. Following depletion of N2O, both MeHg formation and sulfate reduction rapidly resumed, whereas CH4 production remained low, suggesting that N2O affected susceptible microbial guilds differently. MeHg formation strongly coincided with sulfate reduction, supporting prior reports linking sulfate-reducing bacteria to MeHg formation in the Arctic soil. This research highlights complex biogeochemical interactions in governing MeHg and CH4 formation and lays the foundation for future mechanistic studies for improved predictive understanding of MeHg and greenhouse gas fluxes from thawing permafrost ecosystems.